Cathay, which alerted the OFT to the issue, would escape any penalty provided it continued to co-operate, the watchdog said. Its senior director of cartels and criminal enforcement Ali Nikpay said: “It is vital competing companies determine their pricing strategies independently.”

Virgin plans to defend itself robustly against the allegations. “The airline does not believe it has acted in any way contrary to the interests of consumers,” it said.

Cathay said: “Cathay Pacific has a policy of full compliance on competition law issues and will fully co-operate with any authorities if required to.”